Here is a great article from 2016. It discusses a man named Steve Edmundson. Steve’s job was (and still is) to manage the investment assets for the Nevada Public Employee’s Retirement System (NVPERS). At the time the article was published, NVPERS had about $35 billion in assets (nowadays it’s about $54 billion).
Here’s a great quote from the article:
[Edmundson’s] daily trading strategy: Do as little as possible, usually nothing.
The Nevada system’s stocks and bonds are all in low-cost funds that mimic indexes. Mr. Edmundson may make one change to the portfolio a year.
News doesn’t matter much.
Will the 2016 elections affect his portfolio? “No.”
Oil prices? “No.”
He follows Fed Chairwoman Janet Yellen, but “there’s a difference between watching and acting.”
So in essence, Steve manages a huge pot of money by doing as little as possible. This is contrary to what the vast majority of investment “helpers” (i.e. consultants, advisors, experts) advise to many public pension or retirement funds.
And the results generally speak for themselves. In 2022, the NVPERS’ investments ranked in the top 33% of large public pension funds. Over the past 3, 5, 7, and 10-year periods (through June 2022), NVPERS’ returns ranked in the top 10% or better.
Think about that for second. NVPERS uses a low-cost, simplified investment strategy, yet outperforms 90+% of their peer group! That’s a powerful lesson! Doing less (or nothing) can often lead to much better results.
The great news is that everyday investors can use the same strategies employed by NVPERS in their own portfolio. By following the main principles outlined here, almost any investor can build a low-cost, high-quality investment portfolio that can achieve great long-term results.
Don’t be afraid to adopt a less-is-more approach to your investment portfolio. I think it can make a real difference. As Charlie Munger said, “The big money is not in the buying and the selling, but in the waiting.”
